2006 Book Irs Tax is no longer applicable for donations
Q.I remember a Book IRS Tax Law from Jan. 1, 2006 which says the standard tax writeoff for used car donation is $500. Anything worth more than $500 is limited to the gross proceeds from the actual sale of the vehicle by the non-profit organization. Most vehicles remain unsold and are usually scrapped for approx. $100-$300 apiece.So I'm wondering .It's still right at the moment or it changed.Any suggestions for me ?
A.The standard write off is not $500. If the car has a FMV of $500 or less you use the old rules of FMV. If the FMV is above $500 you follow the new rules: 1. If the car is sold without any significant intervening use or material improvement by the charity, your deduction is limited to the amount of gross proceeds from its sale. 2. If the charity intends to make significant intervening use of or materially improve the car, you generally can deduct its fair market value. See IRS Notice (http://surl.co.uk/?2495) for more detail on the definition of significant intervening use or materially improve the car. And yes, if you were to claim a deduction for a vehicle (car, truck, boat, etc) for a greater amount, you need to get papers from the charity that spell out the disposition of the vehicle. Any deduction for you may be limited to the amount the charity sold the vehicle for. In the end, the reality is that your contribution was of a vehicle that really was only worth $100- $300 (less the towing charges.)
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